State final demand in Western Australia rose by 0.9% to $27,066 million in the December quarter 2006 in trend chain volume terms. Despite the domestic economy continuing to grow, the rate of acceleration in state final demand has slowed steadily over the last four quarters, from 3.9% to 0.9% between the December quarters of 2005 and 2006. Western Australia's rise of 0.9% in the current quarter was the third highest increase among the states and territories, behind the Australian Capital Territory (up 1.6%) and Victoria (1.1%). Nationally, domestic final demand increased by 0.8% in the December quarter 2006.

However, in seasonally adjusted chain volume terms, Western Australia recorded the highest rate of growth in state final demand among the states and territories, with an increase of 4.3% ($1,115 million) to $27,306 million in the December quarter 2006. More than half of this growth was driven by investment in non-dwelling construction, up $603 million or 20.5%, while strong contributions also came from machinery and equipment investment (up $299 million or 12.6%) and household final consumption expenditure (up $257 million or 2.0%). Detracting from growth in the December quarter 2006 were falls in general government final consumption expenditure (down $80 million or 2.1%) and ownership transfer costs (down $63 million or 12.3%).